FACUITY OF BUSINESS

DEPARTMENT OF masters of business Administration

Assignment FOR THE FULFILLMENT OF THE COURSE

MARKETING MANAGEMENT

PREPARED BY፡-

LUBABA YESUF (0867/14)

SUBMMITED TO:-

July 2022
Addis Ababa, Ethiopia
 1. Watch the television Advertisements and categorize them as informative, persuasive and
reminding

Informative Advertisement with Example:

Companies use informative advertising to introduce a new product or service or to inform consumers
when an existing product or service is altered.

When there is a new product launch: Informative advertising is used when a company launches a new
product to educate consumers about the features of the product.

For example, an informative advertisement for a new electronic automobile by Marathon Motors.

When there is product/ service upgrades and modifications: When a familiar product or service
undergoes a modification, companies will use informative advertising to notify consumers of changes,
such as added or enhanced features.

For example of this type of informative advertising is a Techno smart phone upgrade. A typical ad
provide information on the phone's operating system, processor speed, screen size and any enhanced
features that vary from the previous version of the product.

Mandatory information: Some companies are required by law to provide significant information to
consumers when advertising certain products.

For example, pharmaceutical companies advertising prescription medications must provide extensive
information on the product, regardless of the media type used to convey the advertisement. Ingredients,
side effects and contraindications of the drug are among the required elements in the informative
advertisement. Companies advertising tobacco products are also required to include certain information,
such as health warnings, in all ads.

Persuasive Advertising 

Persuasive ads are used to advertise established products and services in an attempt to get consumers to
switch brands. Persuasive Advertising tries to convince customers that a company’s services or products
are the best, and it works to alter perceptions and enhance the image of a company or product. Its goal is
to influence consumers to take action and switch brands, try a new product, or remain loyal to a current
brand.

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For example:

 A television advertisement of different commercial banks in Ethiopia

 Social media advertisement of different beer brands,
 Television advertisement of different soft drinks and juice (3D Mango, BoBo, YoYo etc.)

Reminder Advertising

Reminder Advertising reminds people about the need for a product or service, or the features and
benefits it will provide when they purchase promptly. Reminder ads are used for established products
and services to keep the name in front of consumers. 

 A television advertisement of Hayat Real Estate

 A television advertisement of Coca Cola
 A television advertisement of Colgate

2. Visit some organizations and discuss on how the price is set, what are the factors
considered in price setting?

In viewing the practice of setting the price and factors considered during price setting, a student in this
assignment has tried to see four case organizations as a case. To begin, in case of Kangaroo Shoe
Factory, the production and finance departments predominately execute factory-pricing practice and the
top management approves the final price. The involvement of the marketing department in determining
the price of the firm’s product is limited and it is mainly through feedback provision.

Kangaroo Shoe considers several factors in determining the price of its product. Among this, the cost of
production is the dominant one: The Company implements cost-based pricing strategy. Raw material,
overhead, direct and indirect labor costs are estimated and measured strictly to set our profit margin,
however, the company also considers the market condition and sales outlets location to determine a
price.

As the marketing manager of the company indicates it during visit, the main objective in setting a price
is to make a profit. Of course, some situations force a company to drop its profit margin, though making
the company profitable is the first priority. However, during the time of establishment, the company
major concern was sales volume: a company used to sell its product at a very cheap price compared to

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other producers. This made company’s profit margin very small yet the strategy helped us to penetrate
the leather shoe market and to get a good market share.

Secondly, as it is observed from Ethio-leather Industry in Addis, several departments are involved to
decide the price of company’s product. The price setting procedure is started by the cost estimation of
the intended product. Corporate service and planning department are primarily responsible to prepare
the list of costs used to produce the needed product by considering the actual market price of the
necessary raw materials. Following the cost estimation, a profit margin is decided.

In this company, marketing department proposes the top management decides a profit margin and the
final price. The company has a standard percentage of profit margins but it does not use the standard
regularly due to a fluctuation of production cost and dynamic nature of the market. On the contrary, in
the case of an export market, the company is a price taker. The customers come with their own price and
product specification. The manager also added that price is set based on the distribution distance. A
certain amount is added to the price of each product that is sold out of the capital city of the country.
The basic reason for adding a certain amount of price on each product is to compensate for the cost of
transportation in providing the factory product to the required place.

Thus, as we can understand from the above explanation cost of production is the major internal factor
used to decide the price of the company product. Yet for the export business, the international market
price is an external factor that decides the price of the product. In addition, competition is also taken into
consideration to decide the profit margin. Companies’ set its price with the aim of a certain business
objective. According to the marketing manager, the main objective of the factory in setting its price is to
acquire a certain return on investment. In this case, partly to satisfy the needs of customers but more
importantly to achieve a pre-determined level of return on the capital investment involved.

Thirdly, as it is observed from Sheba Leather Industry in Addis, there are six main steps in price
setting strategy of a company. These procedures are applied in both production units: a company price
setting task starts from the preparation of sample product or model of the product. For the local market,
sample product is commonly prepared by the company particularly R&D in consideration of customer
demand yet for export market the sample is usually provided by the customer with a fixed price level.
Then based on the sample product detail cost estimation is carried out in consideration of the actual
market price of the necessary raw material. The sample product with detail cost estimation result is sent
to the production department for the purpose of a pre-production test. The company employs this

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strategy for the sake of confirmation. Using this process the cost and quality standard of the sample
product is checked against the actual production process. After preproduction test, the profit margin is
set by discussion among R&D and other departments particularly marketing. Finally, the proposed profit
margin is presented to the general manager and the general manager approved the profit margin after
having a discussion with the top management team.

Sheba leather considers various internal and external factors in determining a price of its product. Cost
is the dominant element that takes into consideration to set price: for the tanning business unit cost of
production is the primary factor used to set price. Yet market condition and the company marketing
strategy are also considered. In the case of shoe business unit production cost and international market
price are the two main factor used to determine a price. In addition, purchasing power of customer, sales
outlets location and other related aspects are also taken into consideration as an external factor to set a
price of shoe for a local market.

To summarize the price setting practice of case organizations:

Internal factors External Factors Participant

Kangaroo Shoe *Cost of production *Market condition *Marketing dep.
Factory *Sales outlet location *Design dep.
*Production dep.
*Finance dep.
*Top management team
Ethio-Leather *Cost of production *Competition *Corporate service dep.
Industry *Distribution distance *Market condition *Planning dep
*International leather *Marketing dep
market price (particularly *Top management
for export market team

Sheba leather *Cost of production *International leather *R&D dep

Industry *Company marketing market price (particularly *Marketing dep.
strategy for export market) *General manager
*Market condition
*Purchasing power of
target customers
*Sales outlets location

Factors determining the channel choice. Types of Marketing Channels

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 Short Channel Long Channel
If there is: √
Large number of Customers 
High geographical market concentration √
Low order size √
Easily Perishable products √
High technical nature of a product √
High extent of intermediaries’ availability √
The company’s High desire for controlling  √
Good ability of management of the company √
Better Financial resources of the company √